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MPAA’s latest anti-piracy move accidentally screws Hollywood studios

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Re: MPAA’s latest anti-piracy move accidentally screws Hollywood studios

#21

Post by MWil »

If it's true, I don't understand why it took one guy hiring a lawyer on his own who did the detective work necessary to help out the rest of the industry.

You know, instead of like the concerted efforts of the industry itself. Does the VFX arm of the industry just not care to get involved in lobbying/lawyers?

*understanding I read the part of the article that mentioned it's "difficult" because they have no union. If you don't have jobs, you don't have union busting employers - it's literally the best time to make a union.

Re: MPAA’s latest anti-piracy move accidentally screws Hollywood studios

#22

Post by mprovost »

MWil wrote: post #21

If it's true, I don't understand why it took one guy hiring a lawyer on his own who did the detective work necessary to help out the rest of the industry. You know, instead of like the concerted efforts of the industry itself. Does the VFX arm of the industry just not care to get involved in lobbying/lawyers? *understanding I read the part of the article that mentioned it's "difficult" because they have no union. If…

The industry only has 6 customers (the studios) who often negotiate as a single entity (the MPAA) and who are big fans of subsidies, so for a a VFX studio to pursue something by themselves would essentially blacklist them and put them out of business. The brilliance of this plan is that it's being organised by the workers whose lives are being affected.

Re: MPAA’s latest anti-piracy move accidentally screws Hollywood studios

#23

Post by l33tbro »

mprovost wrote: post #20
l33tbro wrote: post #14

Anyone got a source for this comment referenced in the article? "In 2006, Princeton economist Alan Blinder famously warned that the critical economic divide in the future will 'be between those types of work that are easily deliverable through a wire or via wireless connections with little or no diminution in quality, and those that are not.'”

http://www.foreignaffairs.com/articles/61514/alan-s-blinder/...

Thanks

Re: MPAA’s latest anti-piracy move accidentally screws Hollywood studios

#24

Post by netcan »

This article is a little rambling and is only loosely related to anti-piracy

(1) There are all sorts of subsidies internationally for movie related industries/services. (2) US studios are "exporting jobs" by taking advantage of these subsidies to to various editing tasks overseas. (3) This is unfair because of various WTO rules and principles of free trade. (4) US states are responding by doing the same (5) Anti piracy is a higher priority for the US industry.

I don't really see the last point as related to the first 4. The other points are part of a bigger picture in the ongoing globalization process. Countries are "competing" with each other in all sorts of ways. They compete for jobs, FDI & tax revenue in ways they didn't previously, at least not as much. This gets translated into tax breaks, subsidize and lots of other things.

IMO the most interesting part of all this is that a movie cannot be said to be a US, French or South African production anymore. Shooting takes place all over the place. Editing and post production now happen place all over the place too. "Quality" in the form of the best actors or best special effects people is important. Money always flowed more freely than goods, services or labour so that comes from everywhere too as it always has.

IMO the industry is in a unique position. Much of the work is easy to parcel. The 'firm' comes into existence to make a film and then goes away so personal relationships, buildings, equipment and other things that keep firms monolithic (reduced transaction costs is usually considered the biggest advantage large firms have over individual actors transacting in spot markets, Ronald Coase's theoroms) are not much of a factor.

Re: MPAA’s latest anti-piracy move accidentally screws Hollywood studios

#25

Post by MWil »

mprovost wrote: post #22
MWil wrote: post #21

If it's true, I don't understand why it took one guy hiring a lawyer on his own who did the detective work necessary to help out the rest of the industry. You know, instead of like the concerted efforts of the industry itself. Does the VFX arm of the industry just not care to get involved in lobbying/lawyers? *understanding I read the part of the article that mentioned it's "difficult" because they have no union. If…

The industry only has 6 customers (the studios) who often negotiate as a single entity (the MPAA) and who are big fans of subsidies, so for a a VFX studio to pursue something by themselves would essentially blacklist them and put them out of business. The brilliance of this plan is that it's being organised by the workers whose lives are being affected.

But this plan wasn't organized by workers, it was done by one blogger. He may be donating this strategy to any collection of workers willing to make use of it but he paid the lawyers and they only shared it with him.

Re: MPAA’s latest anti-piracy move accidentally screws Hollywood studios

#26

Post by gcb0 »

MWil wrote: post #21

If it's true, I don't understand why it took one guy hiring a lawyer on his own who did the detective work necessary to help out the rest of the industry. You know, instead of like the concerted efforts of the industry itself. Does the VFX arm of the industry just not care to get involved in lobbying/lawyers? *understanding I read the part of the article that mentioned it's "difficult" because they have no union. If…

This is also just a push to a fat deal on some other minor case. i'd guess.

The document they cite is not even ruled over yet. And it will probably be full of references to "end-user consumption" or such, making it null on this VFX issue.

Re: MPAA’s latest anti-piracy move accidentally screws Hollywood studios

#27

Post by mprovost »

MWil wrote: post #25
mprovost wrote: post #22

Earlier quoted context omitted.

The industry only has 6 customers (the studios) who often negotiate as a single entity (the MPAA) and who are big fans of subsidies, so for a a VFX studio to pursue something by themselves would essentially blacklist them and put them out of business. The brilliance of this plan is that it's being organised by the workers whose lives are being affected.

But this plan wasn't organized by workers, it was done by one blogger. He may be donating this strategy to any collection of workers willing to make use of it but he paid the lawyers and they only shared it with him.

He crowdfunded the money to pay the lawyers to look into it, quite a few people in the industry donated, it wasn't all his money. He published the lawyers' findings on his blog. As is often the case, there is one person who is leading the charge and acting as spokesperson, but there are a lot of people involved in this. See how many show up for the march outside the Oscars.

Re: MPAA’s latest anti-piracy move accidentally screws Hollywood studios

#28

Post by gcb0 »

mprovost wrote: post #18
zaroth wrote: post #2

Classification of digital goods as imports? Apparently, now we should we start getting ready for the email tax.

How do you place value on an import? Let's say you import an Airbus, and you have to declare its value. Do you just add up the kgs of aluminium and plexiglass and carbon fibre and steel? Or do you itemise it and say you paid this much for the engines and this much for the fuselage? How do you account for the labour? Or the R&D? Nevermind the computer system(s) that flies the thing. In the world of physical things we…

Not really. If the studio is HQed in California, and they paid a studio in Taiwan, they must declare that money. it is trivial to trace that and tax service accordingly.

What they do, is to "hire" those people as contractors just for that job, pay the upfront price of setting up a fake shop, and avoid all those service taxes.

Similar to you paying someone overseas for a work, versus your company having a research dept in india while HQ in Palo Alto. The upfront costs for the later are higher, but the return if you want to have the indian team larger than the US team will be better in the long run.

Re: MPAA’s latest anti-piracy move accidentally screws Hollywood studios

#29

Post by mprovost »

gcb0 wrote: post #28
mprovost wrote: post #18

Earlier quoted context omitted.

How do you place value on an import? Let's say you import an Airbus, and you have to declare its value. Do you just add up the kgs of aluminium and plexiglass and carbon fibre and steel? Or do you itemise it and say you paid this much for the engines and this much for the fuselage? How do you account for the labour? Or the R&D? Nevermind the computer system(s) that flies the thing. In the world of physical things we…

Not really. If the studio is HQed in California, and they paid a studio in Taiwan, they must declare that money. it is trivial to trace that and tax service accordingly. What they do, is to "hire" those people as contractors just for that job, pay the upfront price of setting up a fake shop, and avoid all those service taxes. Similar to you paying someone overseas for a work, versus your company having a research dep…

Of course Hollywood has accountants that have figured all of this out, they're notorious for it. It's even easier when you do business everywhere, so you can just keep profits from showing movies in the UK in your bank account in London, and the next time you want to make a movie there just pay them out of that account, and export the finished movie back to LA, and the US govt will never see any of that money.

The example about India is a good one, as we know lots of development work is outsourced. The point that this article is making is that the MPAA has argued in court that intellectual property should be imported like any other property. Of course they're doing this to stop "piracy", but the unintended side effect could be that their own IP (the original films) becomes subject to free trade agreements. If that's true, then it could also affect the software industry which is doing essentially the same thing (possibly without subsidies, just taking advantage of different costs of living and wages).

Re: MPAA’s latest anti-piracy move accidentally screws Hollywood studios

#30

Post by beagle3 »

rahimnathwani wrote: post #12
beagle3 wrote: post #10

Earlier quoted context omitted.

Little to non is lost in tax revenue due to hollywood accounting; The money and taxes are accounted for in other entities. It's just the reporting of anything other than gross (and contracts based on that reporting) is misleading.

The money and taxes are accounted for in other entities Are those other entities all based in (and taxed in) the USA?

I have no knowledge; I suppose some are, some are not - yet, that's not illegal and not what Hollywood accounting is all about.

Apple, Microsoft, Google, Ikea and anyone else who can are all doing the same (google "Double Irish Sandwhich" for an example). I think it should be illegal, but apparently it isn't, and if Apple can do it, Hollywood can too.

Hollywood accounting is all about making sure that there is no direct profit booked, so that profit sharing (which they manage to sell even to people who should know better like Stan Lee) essentially become free labor/assets.

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